:: Welcome to SYF Group, Inc ::

Highlights

Bangladesh Facing Gas Supply Crisis

The country is walking the path of a perennial gas crisis where even the best possible situation of striking gas in the off-shore blocks will not give it a respite till 2020.

Unless the government takes immediate policy decisions to secure its energy needs by implementing alternative resources for power generation such as coal and/or nuclear power production, the power situation of the country will soon become bleak. Most of the country's power plants run on gas and Petrobangla [the national oil and gas companyy] is left with no choice but to decline commitments to supply gas to several new green-field power generation projects. Major foreign investments are also being turned down as the Government is unable to commit long term supply of gas to the projects. Recently, a $3 billion investment proposal by TATA Corporation (India) was declined due to lack of such commitments for gas.

Under tremendous pressure, Petrobangla cautiously approved supply of gas to the proposed Bibiyana 450 megawatt power project, 150 MW Sylhet power project, 150 MW Bhola power project and two 150 MW Siddhirganj power projects. It is withholding commitments to supply gas to much needed 450 MW Sirajganj power project and in the near-term has declined to negotiate supply gas to proposed Phase- 3 Meghnaghat 450 MW project, 150 MW Sikalbaha, 240 MW Dhaka North and 150 MW Khulna power projects. PETROBANGLA'S PROJECTIONS (http://www.thedailystar.net/newDesign/photo_gallery.php?pid=82652) As Reported in the Daily Star As per Petrobangla's projection number-1, with the current activities involving gas exploration and production, gas shortfall will hit around 150 million cubic feet a day (mmcfd) in 2011, 350 mmcfd in 2014, 850 mmcfd in 2016 and 1,800+ mmcfd in 2019-20.

The current gas shortfall is over 200 mmcfd while the demand is over 2,000 mmcfd at present and it is projected to rise to 4,600 mmcfd in 2019-20. Today, the power sector--including industrial captive power generators-- is consuming 900 mmcfd, fertilizer factories 290 mmcfd and 580 to 600 mmcfd are being consumed by industrial, commercial and domestic and CNG users. In scenario-2, where international oil companies would discover new gas fields under production sharing contracts (PSCs) signed through the 1998 second round block bidding, the situation would be slightly better in 2011 as it offers 58 mmcfd gas supply surplus. But by 2014-15, this surplus turns into a deficit of 112 mmcfd gas. The deficit rises to 666 mmcfd in 2017 and 1,314 mmcfd in 2019-20.

In scenario-3, where oil companies having off-shore block bidding contracts may strike gas, the situation is even better. Albeit, the supply crunch starts in 2017 with 166 mmcfd deficit, rising to 814 mmcfd in 2019-20.
The SYF Group Report/April/2009:www.syfg.com